Sykes Enterprises, Incorporated Reports Second-Quarter 2011 Financial Results

08/08/2011

Aug 8, 2011 (GlobeNewswire via COMTEX) --

  • Revenues at top-end of business outlook range

  • Operating margins tempered by sluggish demand in EMEA

  • Updating full year 2011 business outlook

TAMPA, Fla., Aug. 8, 2011 (GLOBE NEWSWIRE) -- Sykes Enterprises, Incorporated ("SYKES" or the "Company") (Nasdaq:SYKE), a global leader in providing outsourced customer contact management solutions and services in the business process outsourcing (BPO) arena, announced today its second-quarter 2011 financial results for the three-months ended June 30, 2011.

Second Quarter 2011 Financial Highlights

  • Second quarter 2011 revenues of $309.9 million increased $21.4 million, or 7.4%, from $288.5 million in the comparable quarter last year; on a constant currency basis, second quarter 2011 revenues increased 3.2% comparably driven broadly by growth across the communications, financial services, technology and transportation verticals

  • Second quarter 2011 operating margin was 4.9% versus 3.4% in the same period last year; on an adjusted basis, a non-GAAP measure (see section titled "Non-GAAP Financial Measure" for an explanation and see Exhibit 4 for reconciliation), which excludes certain items including a net pre-tax $3.7 million (or 1.2% of revenues) gain on the sale of a customer contact management facility in Minot, North Dakota and a $1.2 million (or 0.4% of revenues) charitable contribution to the Community Foundation of Tampa Bay, second quarter 2011 operating margin remained unchanged at 5.5% compared to the same period last year as the current quarter was impacted by unfavorable foreign exchange rate movements coupled with previously-discussed (in the first quarter 2011 financial press release) end-of-life client programs that began winding down during the second quarter

  • Second quarter 2011 diluted earnings per share from continuing operations were $0.26 versus $0.09 in the comparable quarter last year, with the year-ago diluted earnings per share impacted by higher ICT acquisition integration related charges, increased foreign currency transaction losses and higher interest expense related to the ICT term loan paid-off in 2010

  • On an adjusted basis and excluding the net benefit related to the facility sale gain and charitable contribution, second quarter 2011 diluted earnings per share were $0.29 compared to an adjusted second quarter 2010 diluted earnings per share of $0.17, with the year-ago diluted earnings per share impacted principally by higher foreign currency transaction losses and higher interest expense related to the ICT term loan paid-off in 2010; relative to the Company's May 2011 business outlook range of $0.31 to $0.34, the decrease in second quarter 2011 adjusted diluted earnings per share was due principally to softening demand in the EMEA region without the commensurate reduction in labor costs coupled with unfavorable foreign exchange rates; assuming interest expense of $0.2 million, which was projected in the Company's May 2011 business outlook, adjusted diluted earnings per share in the second quarter of 2011 would have been $0.30

Americas Region

Revenues generated from the Company's Americas region, including operations in North America and offshore (Latin America, South Asia and the Asia Pacific region), increased 5.2% to $247.5 million, or 79.9% of total revenues, for the second quarter of 2011. Revenues for the prior year period totaled $235.3 million, or 81.6% of total revenues. On a constant currency basis, second quarter 2011 Americas revenues increased 3.1% comparably due largely to growth from existing clients across the financial services, communications, technology and transportation verticals.

During the quarter, revenues generated from services provided offshore remained unchanged at approximately 47% compared to the same period last year.

Sequentially, revenues generated from the Americas region increased 0.4% to $247.5 million in the second quarter of 2011. First quarter 2011 revenues were $246.5 million, or 79.5% of total revenues. On a constant currency basis, second quarter 2011 Americas revenues decreased 0.3% sequentially driven mainly by previously-discussed end-of-life client programs that began winding down during the second quarter.

The Americas income from operations for the second quarter of 2011 increased 21.9% to $31.4 million, with an operating margin of 12.7 % versus 10.9% in the comparable quarter last year. On an adjusted basis (see Exhibit 4 for reconciliation) and excluding the facility sale gain (approximately 1.5% of Americas revenues), the Americas operating margin remained largely unchanged compared with 12.5% in the comparable quarter last year as second quarter 2011 operating margins was impacted by unfavorable foreign exchange rate movements and the aforementioned end-of-life client programs.

Sequentially, the Americas income from operations for the second quarter of 2011 increased 16.1% to $31.4 million, with an operating margin of 12.7% versus 11.0% in the first quarter of 2011. On an adjusted basis, (see Exhibit 6) and excluding the facility sale gain, the Americas operating margin decreased 20 basis points to 12.4% from 12.6%. The decrease was due largely to the aforementioned reasons.

EMEA Region

Revenues from the Company's Europe, Middle East and Africa (EMEA) region increased 17.2% to $62.4 million, representing 20.1% of total revenues for the second quarter of 2011, compared to $53.2 million, or 18.4% of total revenues, in the prior year's second quarter. On a constant currency basis, EMEA revenues increased 3.8% due to growth primarily from existing clients within the communications and transportation verticals.

Sequentially, revenues from the Company's EMEA region decreased 2.0% to $62.4 million for the second quarter of 2011 compared to $63.6 million, or 20.5% of SYKES' total revenues in the first quarter of 2011. On a constant currency basis, EMEA revenues decreased 6.1% sequentially, due to a combination of previously-discussed end-of-life client programs that began winding down during the second quarter, fewer production days in certain countries within the EMEA region related to a calendar shift (for example, both Friday April 22nd and Monday April 25th were part of the Easter holiday in Sweden and the U.K.) and softening demand starting in June due to macro-economic uncertainty.

The EMEA region's loss from operations for the second quarter of 2011 was $3.4 million, or 5.4% of EMEA revenues, versus an operating loss of $3.9 million, or 7.3% of revenues, in the comparable quarter last year. On an adjusted basis (see Exhibit 4 for reconciliation), the comparable operating margin was a negative 4.9% versus a negative 7.3% in the comparable quarter last year, driven largely by a combination of higher revenues in the second quarter of 2011 and higher costs last year related to demand migration to near-shore geographies including Cluj, Romania, Cairo, Egypt and Berlin, Germany, and the corresponding termination and duplicative costs.

Sequentially, the EMEA region generated a loss from operations of $3.4 million, or 5.4% of EMEA revenues, versus operating income of $0.5 million, or 0.8% of revenues, in the first quarter of 2011. On an adjusted basis (see Exhibit 6), the EMEA operating margin was a negative 4.9% versus income of 0.8% due largely to the aforementioned factors impacting revenues without a commensurate reduction in labor costs.

Corporate G&A Expenses

Corporate costs increased to $12.8 million, or 4.1% of revenues, in the second quarter of 2011, compared to $12.0 million, or 4.2% of revenues, in the comparable quarter last year. Second quarter 2011 corporate costs include a $1.2 million charitable contribution and $1.0 million in professional services fees incurred in consideration of a possible corporate development opportunity which the Company decided not to pursue. On an adjusted basis (see Exhibit 4 for reconciliation), which excludes the aforementioned charitable contribution and the professional services fees, corporate costs increased 10.1% to $10.7 million, or 3.4% of revenues, from $9.7 million, or 3.4% of revenues, in the comparable period last year due chiefly to higher compensation expenses.

Sequentially, corporate costs increased to $12.8 million, or 4.1% of revenues, in the second quarter of 2011, from $12.2 million, or 3.9% of revenues, in the first quarter of 2011. On an adjusted basis (see Exhibit 6), corporate costs decreased to $10.7 million, or 3.4% of revenues, from $12.0 million, or 3.9% of revenues, in the first quarter of 2011, due principally to timing of certain expenses and lower compensation expense.

Gain on Sale of Facility

During the second quarter, the Company recorded a net pre-tax gain of $3.7 million on the sale of its Minot, North Dakota, customer contact management facility. The facility, which was opened in 1996, closed in the second quarter of 2009 due to acute labor constraints driven by competition for labor from the natural resource industry.

Interest & Other Expense and Taxes

Interest and other expense for the second quarter of 2011 totaled approximately $0.5 million compared to interest and other expense of $4.8 million for the same period in the prior year. The decrease in interest and other expense was due principally to a reduction in realized and unrealized foreign currency transaction losses coupled with lower interest expense related to the term loan associated with the ICT acquisition paid-off in 2010.

The Company's effective tax rate from continuing operations was 18.3% for the second quarter 2011 versus 19.5% in the same period last year and roughly in-line with the estimated 18% provided in the Company's May 2011 business outlook. The decrease in the tax rate compared to the same period last year was due principally to a shift in the mix of earnings to lower tax jurisdictions.

On an adjusted basis, second quarter 2011 tax rate was 18.8% compared to 26.3% in the same period last year and roughly in-line with the estimated 19% provided in the Company's May 2011 business outlook. The decrease in the tax rate compared to the same period last year was due mainly to a shift in the geographic mix of earnings to lower tax rate jurisdictions.

Liquidity and Capital Resources

The Company's balance sheet at June 30, 2011 remained strong with cash and cash equivalents of $211.9 million, excluding restricted cash of $0.5 million. Approximately 72.0%, or $152.6 million, was held in international operations and may be subject to additional taxes if repatriated to the United States, including withholding tax applied by the country of origin and U.S. taxes on the dividend income. At June 30, 2011, the Company had $75 million of undrawn borrowing capacity available under its revolving credit facility. Cash flow from operating activities in the second quarter 2011 was $14.0 million versus $27.1 million in the same period last year, with the decrease due principally to timing-related changes in operating assets and liabilities.

Business Outlook

The assumptions driving the business outlook for the third quarter and full-year 2011 are as follows:

  • Based on sluggish demand forecasts from clients driven by macro-economic uncertainty, the growth assumptions underlying the previous full-year 2011 revenue and diluted earnings per share outlook discussed in the May 2nd, 2011 financial release have moderated. Within the Americas region, the ramp-up of new and existing programs continues to progress largely in-line. However, the Company has started to experience un-even demand among certain clients. Combined with end-of-life client program phase outs, these factors are expected to more-than-offset ramps of new and existing client programs. Within the EMEA region, the Company is experiencing demand softness, which began in June and persists to-date. Although there are a greater number of production days in the third quarter relative to the second quarter, the associated favorable revenue impact is expected to be more than offset by lower demand, coupled with end-of-life client programs that began winding down during the second quarter. In response to the changes in underlying demand, the Company is taking actions to optimize its direct cost structure;

  • The Company's revenues and adjusted earnings per share assumptions for the third quarter and full year are based on foreign exchange rates as of July 2011. Therefore, the continued volatility in foreign exchange rates between the U.S. dollar and the functional currencies of the markets the Company serves could have a significant impact, positive or negative, on revenues and adjusted earnings per share relative to the business outlook for the third quarter and full-year. Additionally, third quarter diluted earnings per share - both reported and adjusted - do not anticipate further one-time items that benefitted second quarter 2011 reported diluted earnings per share on a net basis by $0.04 and adjusted diluted earnings per share by $0.02;

  • The Company plans to increase its seat additions on a gross basis to 2,100 from 1,800 for the full-year, 1,400 of which have already been added on a gross basis through the second quarter of 2011. The increase is anticipated in select delivery geographies, including China, Australia and Romania. Similarly, the Company expects on-going ramp costs through the remainder of the year. The Company expects to add approximately 200 seats on a gross basis in the third quarter, in addition to the 1,100 seats that were added in the second quarter;

  • The Company anticipates interest and other expense of approximately $0.5 million for the third quarter and $3.1 million for the full year 2011. The aforementioned amounts exclude the potential impact of any future foreign exchange gains or losses in other expense; and

  • Relative to the second quarter, the Company anticipates a higher effective tax rate for the third-quarter driven by a shift in the geographic mix of earnings to higher tax rate jurisdictions. Yet for full-year 2011, the Company now anticipates a lower effective tax rate due to the first quarter discrete adjustment related to a favorable resolution of a tax audit.

Considering the above factors, the Company anticipates the following financial results for the three months ended September 30, 2011:

  • Revenues in the range of $300.0 million to $305.0 million

  • Tax rate of approximately 22%; on an adjusted basis, a tax rate of approximately 23%

  • Fully diluted share count of approximately 46.3 million

  • *Diluted earnings per share of approximately $0.22 to $0.24

  • Adjusted diluted earnings per share in the range of $0.27 to $0.29

  • Capital expenditures in the range of $7.0 million to $9.0 million

For the twelve months ended December 31, 2011, the Company anticipates the following financial results:

  • Revenues in the range of $1,220.0 million to $1,230.0 million

  • Tax rate of approximately 17%; on an adjusted basis, a tax rate of approximately 18%

  • Fully diluted share count of approximately 46.5 million

  • *Diluted earnings per share of approximately $0.99 to $1.04

  • Adjusted diluted earnings per share in the range of $1.19 to $1.24

  • Capital expenditures in the range of $28.0 million to $32.0 million

*See "Business Outlook Reconciliation" (Exhibit 9) for Third Quarter and Full-Year 2011 earnings per share.

Conference Call

The Company will conduct a conference call regarding the content of this release tomorrow, August 9, 2011, at 10:00 a.m. Eastern Time. The conference call will be carried live on the Internet. Instructions for listening to the call over the Internet are available on the Investors page of SYKES' website at www.sykes.com. A replay will be available at this location for two weeks. This press release is also posted on the SYKES website at http://investor.sykes.com/phoenix.zhtml?c=119541&p=irol-news&nyo=0.

Non-GAAP Financial Measure

Adjusted earnings per diluted share and adjusted operating margins are important indicators of performance as these non-GAAP financial measures assist readers in further understanding the Company's results of operations and trends from period-to-period exclusive of certain items. The term "adjusted basis", as referenced throughout the press release, includes the ICT acquisition but excludes ICT acquisition-related costs (see Exhibit 4 for reconciliation) such as those associated with capacity rationalization and facilities consolidation, coupled with items one-time in nature. Also excluded in the adjusted amounts for the second quarter 2011 financial results are a charitable contribution, gain on sale of a customer contact management facility and professional services fees related to a corporate development opportunity. Adjusted earnings per diluted share and adjusted operating margins, however, are supplemental measures of performance that are not required by, or presented in accordance with, U.S. Generally Accepted Accounting Principles (GAAP). Refer to the tables in the release for a detailed reconciliation.

About Sykes Enterprises, Incorporated

SYKES is a global leader in providing customer contact management solutions and services in the business process outsourcing (BPO) arena. SYKES provides an array of sophisticated customer contact management solutions to Fortune 1000 companies around the world, primarily in the communications, financial services, healthcare, technology and transportation and leisure industries. SYKES specializes in providing flexible, high quality customer support outsourcing solutions with an emphasis on inbound technical support and customer service. Headquartered in Tampa, Florida, with customer contact management centers throughout the world, SYKES provides its services through multiple communication channels encompassing phone, e-mail, web and chat. Utilizing its integrated onshore/offshore global delivery model, SYKES serves its clients through two geographic operating segments: the Americas (United States, Canada, Latin America, India and the Asia Pacific region) and EMEA (Europe, Middle East and Africa). SYKES also provides various enterprise support services in the Americas and fulfillment services in EMEA, which include multi-lingual sales order processing, payment processing, inventory control, product delivery and product returns handling. For additional information please visit www.sykes.com.

Forward-Looking Statements

This press release may contain "forward-looking statements," including SYKES' estimates of future business outlook, prospects or financial results, statements regarding SYKES' objectives, expectations, intentions, beliefs or strategies, or statements containing words such as "believe," "estimate," "project," "expect," "intend," "may," "anticipate," "plans," "seeks," "implies," or similar expressions. It is important to note that SYKES' actual results could differ materially from those in such forward-looking statements, and undue reliance should not be placed on such statements. Among the important factors that could cause such actual results to differ materially are (i) the impact of economic recessions in the U.S. and other parts of the world, (ii) fluctuations in global business conditions and the global economy, (iii) SYKES' ability to continue the growth of its support service revenues through additional technical and customer contact centers, (iv) currency fluctuations, (v) the timing of significant orders for SYKES' products and services, (vi) loss or addition of significant clients, (vii) the early termination of contracts by clients, (viii) SYKES' ability to recognize deferred revenue through delivery of products or satisfactory performance of services, (ix) construction delays of new or expansion of existing customer support centers, (x) difficulties or delays in implementing SYKES' bundled service offerings, (xi) failure to achieve sales, marketing and other objectives, (xii) variations in the terms and the elements of services offered under SYKES' standardized contract including those for future bundled service offerings, (xiii) changes in applicable accounting principles or interpretations of such principles, (xiv) delays in the Company's ability to develop new products and services and market acceptance of new products and services, (xv) rapid technological change, (xvi) political and country-specific risks inherent in conducting business abroad, (xvii) SYKES' ability to attract and retain key management personnel, (xviii) SYKES' ability to further penetrate into vertically integrated markets, (xix) SYKES' ability to expand its global presence through strategic alliances and selective acquisitions, (xx) SYKES' ability to continue to establish a competitive advantage through sophisticated technological capabilities, (xxi) the ultimate outcome of any lawsuits or penalties (regulatory or otherwise), (xxii) SYKES' dependence on trends toward outsourcing, (xxiii) risk of interruption of technical and customer contact management center operations due to such factors as fire, earthquakes, inclement weather and other disasters, power failures, telecommunications failures, unauthorized intrusions, computer viruses and other emergencies, (xxiv) the existence of substantial competition, (xxv) the ability to obtain and maintain grants and other incentives, including tax holidays or otherwise, (xxvi) the potential of cost savings/synergies associated with the ICTG acquisition not being realized, or not being realized within the anticipated time period, (xxvii) risks related to the integration of the businesses of SYKES and ICTG and (xxviii) other risk factors listed from time to time in SYKES' registration statements and reports as filed with the Securities and Exchange Commission. All forward-looking statements included in this press release are made as of the date hereof, and SYKES undertakes no obligation to update any such forward-looking statements, whether as a result of new information, future events, or otherwise.

             Sykes Enterprises, Incorporated
     Condensed Consolidated Statements of Operations
          (in thousands, except per share data)
                       (Unaudited)
                        Exhibit 1
                                      Three Months
                                  June 30,    June 30,
                                    2011        2010
                                 ----------  ----------
  Revenues                        $ 309,914   $ 288,535
  Direct salaries and related
   costs                          (208,301)   (188,693)
  General and administrative       (90,087)    (90,075)
  Net gain on disposal of
   property and equipment             3,611          20
                                 ----------  ----------
  Income from continuing
   operations                        15,137       9,787
  Other (expense), net                (483)     (4,842)
                                 ----------  ----------
  Income from continuing
   operations before taxes           14,654       4,945
  Income taxes                      (2,683)       (966)
                                 ----------  ----------
  Income from continuing
   operations, net of taxes          11,971       3,979
  Loss from discontinued
   operations                            --     (1,434)
                                 ----------  ----------
  Net Income                       $ 11,971     $ 2,545
                                 ==========  ==========
  Net Income (loss) per share:
  Basic:
   Continuing operations             $ 0.26      $ 0.09
   Discontinued operations               --      (0.04)
                                 ----------  ----------
   Net Income (loss) per share       $ 0.26      $ 0.05
                                 ==========  ==========
  Diluted:
   Continuing operations             $ 0.26      $ 0.09
   Discontinued operations               --      (0.04)
                                 ----------  ----------
   Net Income (loss) per share       $ 0.26      $ 0.05
                                 ==========  ==========
  Weighted average shares:
   Basic                             46,241      46,601
                                 ==========  ==========
   Diluted                           46,293      46,648
                                 ==========  ==========
              Sykes Enterprises, Incorporated
      Condensed Consolidated Statements of Operations
           (in thousands, except per share data)
                        (Unaudited)
                         Exhibit 2
                                      Six Months Ended
                                    June 30,    June 30,
                                      2011        2010
                                   ----------  ----------
  Revenues                          $ 620,070   $ 555,117
  Direct salaries and related
   costs                            (411,989)   (360,343)
  General and administrative        (180,297)   (190,040)
  Net gain (loss) on disposal of
   property and equipment               3,443        (38)
  Impairment of long-lived assets       (726)          --
                                   ----------  ----------
  Income from continuing
   operations                          30,501       4,696
  Other (expense), net                (2,096)     (8,385)
                                   ----------  ----------
  Income (loss) from continuing
   operations before taxes             28,405     (3,689)
  Income taxes                        (3,256)       (499)
                                   ----------  ----------
  Income (loss) from continuing
   operations, net of taxes            25,149     (4,188)
  Loss from discontinued
   operations                              --     (2,780)
                                   ----------  ----------
  Net Income (loss)                  $ 25,149   $ (6,968)
                                   ==========  ==========
  Net Income (loss) per share:
  Basic:
   Continuing operations               $ 0.54    $ (0.09)
   Discontinued operations                 --      (0.06)
                                   ----------  ----------
   Net Income (loss) per share         $ 0.54    $ (0.15)
                                   ==========  ==========
  Diluted:
   Continuing operations               $ 0.54    $ (0.09)
   Discontinued operations                 --      (0.06)
                                   ----------  ----------
   Net Income (loss) per share         $ 0.54    $ (0.15)
                                   ==========  ==========
  Weighted average shares:
   Basic                               46,359      45,604
                                   ==========  ==========
   Diluted                             46,463      45,712
                                   ==========  ==========
       Sykes Enterprises, Incorporated
               Segment Results
               (in thousands)
                 (Unaudited)
                  Exhibit 3
                          Three Months
                      June 30,    June 30,
                        2011        2010
                     ----------  ----------
  Revenues:
   Americas           $ 247,543   $ 235,315
   EMEA                  62,371      53,220
                     ----------  ----------
     Total            $ 309,914   $ 288,535
                     ==========  ==========
  Operating Income
   (loss):
   Americas            $ 31,377    $ 25,744
   EMEA                 (3,388)     (3,908)
   Corporate G&A
    expenses           (12,852)    (12,049)
                     ----------  ----------
   Income from
    continuing
    operations           15,137       9,787

   Other income
    (expense), net        (483)     (4,842)
   Income taxes         (2,683)       (966)
                     ----------  ----------
  Income from
   continuing
   operations, net
   of taxes            $ 11,971     $ 3,979
                     ==========  ==========

                        Six Months Ended
                      June 30,    June 30,
                        2011        2010
                     ----------  ----------
  Revenues:
   Americas           $ 494,078   $ 442,218
   EMEA                 125,992     112,899
                     ----------  ----------
     Total            $ 620,070   $ 555,117
                     ==========  ==========
  Operating Income:
   Americas            $ 59,128    $ 53,056
   EMEA                 (2,869)     (4,614)
   Corporate G&A
    expenses           (25,032)    (43,746)
   Impairment of
    long-lived
    assets                (726)          --
                     ----------  ----------
   Income from
    continuing
    operations           30,501       4,696
   Other income
    (expense), net      (2,096)     (8,385)
   Income taxes         (3,256)       (499)
                     ----------  ----------
   Net income
    (loss)             $ 25,149   $ (4,188)
                     ==========  ==========
                                        Sykes Enterprises, Incorporated
                                Condensed Consolidated Statements of Operations
                                     (in thousands, except per share data)
                                                   Exhibit 4
                                                               Three Months Ended
                                                                  June 30, 2011

                                                      Acquisition related Costs
                                               --------------------------------------
                                                                 ICT
                                                            Depreciation
                                                   ICT           and
                                                            Amortization
                                                Severance        of          Merger
                                                             Property &
                                    SYKES +         &        Equipment         &                    SYKES +
                                      ICT       Consulting       and      Integration                 ICT
                                                             Intangibles
                                    Reported    Engagement   Write-Ups       Costs        Other     Adjusted
                                   ----------  -----------  ------------  -----------  ----------  ----------
  Revenues                          $ 309,914                                                       $ 309,914
  Direct salaries and related
   costs                            (208,301)                                                       (208,301)
  General and administrative         (90,087)                    $ 2,994      $ 1,338     $ 1,200    (84,555)
  Net gain (loss) on disposal of
   property and equipment               3,611                                             (3,714)       (103)
                                   ----------  -----------  ------------  -----------  ----------  ----------
  Income from continuing
   operations                          15,137            0         2,994        1,338     (2,514)      16,955
  Other (expense), net                  (483)                                                           (483)
                                   ----------  -----------  ------------  -----------  ----------  ----------
  Income from continuing
   operations before taxes             14,654            0         2,994        1,338     (2,514)      16,472
  Income taxes                        (2,683)            0         (896)        (400)         880     (3,099)
                                   ----------  -----------  ------------  -----------  ----------  ----------
  Income from continuing
   operations, net of taxes          $ 11,971         $ --       $ 2,098        $ 938   $ (1,634)    $ 13,373
                                   ----------  -----------  ------------  -----------  ----------  ----------
  Income from continuing
   operations, net of taxes per
   basic share                         $ 0.26         $ --        $ 0.05       $ 0.02    $ (0.04)      $ 0.29
   Shares outstanding, basic           46,241       46,241        46,241       46,241      46,241      46,241
  Income from continuing
   operations, net of taxes per
   diluted share                       $ 0.26         $ --        $ 0.05       $ 0.02    $ (0.04)      $ 0.29
   Shares outstanding, diluted         46,293       46,293        46,293       46,293      46,293      46,293

                                                      Acquisition related Costs
                                               --------------------------------------
                                                                 ICT
                                                            Depreciation
                                                   ICT           and
                                                            Amortization
                                                Severance        of          Merger
                                                             Property &
                                    SYKES +         &        Equipment         &                    SYKES +
                                      ICT       Consulting       and      Integration                 ICT
                                                             Intangibles
                                    Reported    Engagement   Write-Ups       Costs        Other     Adjusted
                                   ----------  -----------  ------------  -----------  ----------  ----------
  Revenues:
   Americas                         $ 247,543                                                       $ 247,543
   EMEA                                62,371                                                          62,371
                                   ----------  -----------  ------------  -----------  ----------  ----------
     Total                          $ 309,914         $ --          $ --         $ --               $ 309,914
                                   ==========  ===========  ============  ===========  ==========  ==========
  Operating Income:
   Americas                          $ 31,377                    $ 2,994         $ 29   $ (3,714)    $ 30,686
   EMEA                               (3,388)                                     331                 (3,057)
   Corporate G&A expenses            (12,852)                                     978       1,200    (10,674)
                                   ----------  -----------  ------------  -----------  ----------  ----------
  Income from continuing
   operations                          15,137            0         2,994        1,338     (2,514)      16,955
   Other (expense), net                 (483)                                                           (483)
  Income taxes                        (2,683)            0         (896)        (400)         880     (3,099)
                                   ----------  -----------  ------------  -----------  ----------  ----------
  Income from continuing
   operations, net of taxes          $ 11,971         $ --       $ 2,098        $ 938   $ (1,634)    $ 13,373
                                   ==========  ===========  ============  ===========  ==========  ==========
                                         Sykes Enterprises, Incorporated
                                 Condensed Consolidated Statements of Operations
                                     (in thousands, except per share data)
                                                   Exhibit 5
                                                                 Six Months Ended
                                                                   June 30, 2011

                                                       Acquisition related Costs
                                                --------------------------------------
                                                                  ICT
                                                             Depreciation
                                                    ICT           and
                                                             Amortization
                                                 Severance        of          Merger
                                                              Property &
                                     SYKES +         &        Equipment         &                    SYKES +
                                       ICT       Consulting       and      Integration                 ICT
                                                              Intangibles
                                     Reported    Engagement   Write-Ups       Costs        Other     Adjusted
                                    ----------  -----------  ------------  -----------  ----------  ----------
  Revenues                           $ 620,070                                                       $ 620,070
  Direct salaries and related
   costs                             (411,989)                                                       (411,989)
  General and administrative         (180,297)        $ 126       $ 6,052      $ 1,571     $ 1,200   (171,348)
  Net gain (loss) on disposal of
   property and equipment                3,443                                             (3,714)       (271)
  Impairment of long-lived assets        (726)                                     726                      --
                                    ----------  -----------  ------------  -----------  ----------  ----------
  Income from continuing
   operations                           30,501          126         6,052        2,297     (2,514)      36,462
  Other (expense), net                 (2,096)                                                         (2,096)
                                    ----------  -----------  ------------  -----------  ----------  ----------
  Income from continuing
   operations before taxes              28,405          126         6,052        2,297     (2,514)      34,366
  Income taxes                         (3,256)         (31)       (1,648)        (636)         880     (4,691)
                                    ----------  -----------  ------------  -----------  ----------  ----------
  Income from continuing
   operations, net of taxes           $ 25,149         $ 95       $ 4,404      $ 1,661   $ (1,634)    $ 29,675
                                    ----------  -----------  ------------  -----------  ----------  ----------
  Income from continuing
   operations, net of taxes per
   basic share                          $ 0.54         $ --        $ 0.10       $ 0.04    $ (0.04)      $ 0.64
   Shares outstanding, basic            46,359       46,359        46,359       46,359      46,359      46,359
  Income from continuing
   operations, net of taxes per
   diluted share                        $ 0.54         $ --        $ 0.10       $ 0.04    $ (0.04)      $ 0.64
   Shares outstanding, diluted          46,463       46,463        46,463       46,463      46,463      46,463

                                                       Acquisition related Costs
                                                --------------------------------------
                                                                  ICT
                                                             Depreciation
                                                    ICT           and
                                                             Amortization
                                                 Severance        of          Merger
                                                              Property &
                                     SYKES +         &        Equipment         &                    SYKES +
                                       ICT       Consulting       and      Integration                 ICT
                                                              Intangibles
                                     Reported    Engagement   Write-Ups       Costs        Other     Adjusted
                                    ----------  -----------  ------------  -----------  ----------  ----------
  Revenues:
   Americas                          $ 494,078                                                       $ 494,078
   EMEA                                125,992                                                         125,992
                                    ----------  -----------  ------------  -----------  ----------  ----------
     Total                           $ 620,070         $ --          $ --         $ --               $ 620,070
                                    ==========  ===========  ============  ===========  ==========  ==========
  Operating Income:
   Americas                           $ 59,128                    $ 6,052        $ 262   $ (3,714)    $ 61,728
   EMEA                                (2,869)                                     331                 (2,538)
   Corporate G&A expenses             (25,032)          126                        978       1,200    (22,728)
   Impairment of long-lived assets       (726)                                     726                      --
                                    ----------  -----------  ------------  -----------  ----------  ----------
  Income from continuing
   operations                           30,501          126         6,052        2,297     (2,514)      36,462
   Other (expense), net                (2,096)                                                         (2,096)
   Income taxes                        (3,256)         (31)       (1,648)        (636)         880     (4,691)
                                    ----------  -----------  ------------  -----------  ----------  ----------
  Income from continuing
   operations, net of taxes           $ 25,149         $ 95       $ 4,404      $ 1,661   $ (1,634)    $ 29,675
                                    ==========  ===========  ============  ===========  ==========  ==========
           Sykes Enterprises, Incorporated
                   Segment Results
                   (in thousands)
                     (Unaudited)
                      Exhibit 6
                               Three Months Ended
                              Adjusted    Adjusted
                              June 30,    March 31,
                                2011        2011
                             ----------  ----------
  Revenues                    $ 309,914   $ 310,156
  Direct salaries and
   related costs              (208,301)   (203,689)
  General and
   administrative              (84,658)    (86,958)
                             ----------  ----------
  Income from continuing
   operations                    16,955      19,509
  Other (expense), net            (483)     (1,615)
                             ----------  ----------
  Income from continuing
   operations before taxes       16,472      17,894

  Income taxes                  (3,099)     (1,592)
                             ----------  ----------
  Income from continuing
   operations, net of taxes    $ 13,373    $ 16,302
                             ----------  ----------
  Income from continuing
   operations, net of taxes
   per basic share               $ 0.29      $ 0.35
   Shares outstanding,
    basic                        46,241      46,409
  Income from continuing
   operations, net of taxes
   per diluted share             $ 0.29      $ 0.35
   Shares outstanding,
    diluted                      46,293      46,577
                               Three Months Ended
                              Adjusted    Adjusted
                              June 30,    March 31,
                                2011        2011
                             ----------  ----------
  Revenues:
   Americas                   $ 247,543   $ 246,535
   EMEA                          62,371      63,621
                             ----------  ----------
     Total                    $ 309,914   $ 310,156
                             ==========  ==========
  Operating Income:
   Americas                    $ 30,686    $ 31,031
   EMEA                         (3,057)         519
   Corporate G&A expenses      (10,674)    (12,041)
                             ----------  ----------
   Income from continuing
    operations                   16,955      19,509
   Other (expense), net           (483)     (1,615)
   Income taxes                 (3,099)     (1,592)
                             ----------  ----------
   Income from continuing
    operations, net of
    taxes                      $ 13,373    $ 16,302
                             ==========  ==========
            Sykes Enterprises, Incorporated
         Condensed Consolidated Balance Sheets
                     (in thousands)
                       Exhibit 7
                                            December
                                June 30,      31,
                                  2011        2010
                               ----------  ----------
  Assets:
  Current assets                $ 519,084   $ 472,288
  Property and equipment, net     102,211     113,703
  Goodwill & Intangibles, net     173,933     175,055
  Other noncurrent assets          33,757      33,554
                               ----------  ----------
   Total assets                 $ 828,985   $ 794,600
                               ==========  ==========
  Liabilities & Shareholders'
   Equity:
  Current liabilities           $ 168,679   $ 158,730
  Noncurrent liabilities           49,239      52,675
  Shareholders' equity            611,067     583,195
                               ----------  ----------
   Total liabilities and
    shareholders' equity        $ 828,985   $ 794,600
                               ==========  ==========
            Sykes Enterprises, Incorporated
                   Supplementary Data

                                Q2 2011     Q2 2010
                               ----------  ----------
  Geographic Mix (% of Total
   Revenues):
  Americas (1)                      79.9%       81.6%
  Europe, Middle East &
   Africa (EMEA)                    20.1%       18.4%
                               ----------  ----------
   Total:                          100.0%      100.0%
  (1) Includes the United States, Canada, Latin
   America, South Asia and the Asia Pacific (APAC)
   Region. Latin America,
  South Asia and APAC are included in the Americas
   due to the nature of the business and client
   profile, which is primarily
  made up of U.S. based
   clients.
                                Q2 2011     Q2 2010
                               ----------  ----------
  Vertical Industry Mix (% of Total
   Revenues):
  Communications                      32%         33%
  Financial Services                  28%         25%
  Technology / Consumer               19%         20%
  Transportation & Leisure             7%          7%
  Healthcare                           6%          7%
  Other                                8%          8%
                               ----------  ----------
   Total:                            100%        100%
             Sykes Enterprises, Incorporated
                Cash Flow from Operations
                     (in thousands)
                       (Unaudited)
                        Exhibit 8
                                   Three Months Ended
                                   June 30,   June 30,
                                     2011       2010
                                  ---------  ----------
  Cash Flow From Operating
   Activities:
   Net income                      $ 11,971     $ 2,545
   Depreciation and amortization   $ 14,034      15,252
   Changes in assets and
    liabilities and other          (11,986)       9,323
                                  ---------  ----------
   Net cash provided by
    operating activities           $ 14,019    $ 27,120
                                  =========  ==========
  Capital expenditures              $ 7,192     $ 7,342
  Cash interest paid                  $ 260       $ 876
  Cash taxes paid                   $ 5,269     $ 6,362
                                     Six Months Ended
                                   June 30,   June 30,
                                     2011       2010
                                  ---------  ----------
  Cash Flow From Operating
   Activities:
   Net income (loss)               $ 25,149   $ (6,968)
   Depreciation and amortization     28,266      28,015
   Changes in assets and
    liabilities and other          (19,367)    (10,727)
                                  ---------  ----------
   Net cash provided by
    operating activities           $ 34,048    $ 10,320
                                  =========  ==========
  Capital expenditures             $ 13,367    $ 13,470
  Cash interest paid                  $ 521     $ 1,968
  Cash taxes paid                  $ 12,090    $ 13,107
                 Sykes Enterprises, Incorporated
                Business Outlook Reconciliation*
                           Exhibit 9
                                             Business Outlook
                                               Third Quarter
                                                   2011
                                            ------------------
  Adjusted Diluted Earnings Per Share         $0.27 -- $0.29
   Severance & Consulting Engagement Costs
   Merger and Integration Costs, including
    Impairment
   Depreciation & Amortization of Property
    & Equipment and Intangibles Write-Ups        ($0.05)
                                            ------------------
  Diluted Earnings Per Share                  $0.22 -- $0.24
                                             Business Outlook
                                                 Full Year
                                                   2011
                                            ------------------
  Adjusted Diluted Earnings Per Share         $1.19 -- $1.24
   Severance & Consulting Engagement Costs
   Merger and Integration Costs                  ($0.04)
   Depreciation & Amortization of Property
    & Equipment and Intangibles Write-Ups        ($0.20)
   Other                                           $0.04
                                            ------------------
  Diluted Earnings Per Share                  $0.99 -- $1.04

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SOURCE: Sykes Enterprises, Inc.

CONTACT: Subhaash Kumar
Sykes Enterprises, Incorporated
(813) 233-7143